AGREEMENT FOR PURCHASE AND SALE
OF ASSETS
This Agreement
for Purchase and Sale of Assets (“Agreement”) is made
as of January 27, 2009 by and among Medical Equipment Solutions,
Inc. (“Seller”), a Georgia corporation with a principal
address of 19347 King Palm Court, Boca Raton, Florida, 33498, and
Modern Medical Modalities Corporation (“Buyer”), a
publicly traded New Jersey corporation with a principal business
address of 439 Chestnut Street, Union, New Jersey, with reference
to the following:
RECITALS
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Buyer operates
diagnostic imaging centers in Union, New Jersey.
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B. Buyer
and Seller have an agreement whereby Seller performs services for
Buyer’s wholly-owned subsidiary, Union Imaging Center, LLC
(“UIC”), for a fee of 5% of monthly collections of UIC
(the “Management Contract”), which represents
Seller’s entire interest in UIC’s cash collections net
of professional reading fees.
C. Buyer
owes Seller $127,214.59 for services performed by Seller through
December 31, 2008 under the Management Contract (the “Past
Due”).
D. Union
Imaging Associates, JV (“UIA, JV”) uses in its business
operations a GE Millenium VG nuclear camera, in which Seller has a
100% ownership interest (the “GE Camera”).
E. Buyer
controls 100% of the interests in UIA,JV.
F. Seller
and UIA, JV each have a 50% interest in a joint venture known as
PET Scan at Union Imaging, LLC (the “Joint
Venture”).
G. Seller
and UIA, JV, which is owned 90% by Buyer’s wholly-owned
subsidiary United Imaging Associates, Inc. and 10% by Buyer
directly, are parties to a Rental and Service Agreement dated
February 5, 2006 (the “Rental Agreement”), pursuant to
which Seller is to provide UIA, JV with the GE Camera at UIA,
JV’s facility located at 418 Chestnut Street, Union, New
Jersey 07083, in consideration of which Seller is to receive 50% of
the revenues earned from studies performed using the GE Camera, net
of professional reading fees paid to radiologists in connection
with such studies.
H. Buyer
wishes to acquire from Seller all of Seller’s rights, title
and interests in and to (i) the Management
Contract, (ii) the GE Camera, (iii) the Rental
Agreement, and (iv) Seller’s entire interest in the assets of
the Joint Venture ((i), (ii), (iii) and (iv) collectively, (the
“Assets”).
NOW, THEREFORE , in consideration of the mutual covenants and
conditions contained herein, the parties hereto agree as
follows:
AGREEMENT
1.
Sale and Transfer of Assets . Subject to
the terms and conditions set forth in this Agreement, Seller agrees
to sell, convey, transfer, assign, and deliver to Buyer, and Buyer
agrees to purchase from Seller, all of Seller’s rights, title
and interests in and to the Assets.
2.
Consideration/Deliveries From Buyer at Closing .
As full payment for the transfer of the Assets to Buyer
at the closing of the sale of the Assets (the
“Closing”), Buyer shall deliver to Seller a promissory
note, in the form of Exhibit A attached hereto (the
“Note”), in the aggregate principal amount of $540,000
(the “Purchase Price”), bearing no interest, with all
outstanding principal due on the earlier of March 31, 2009 or the
day on which Buyer consummates the sale of its interests in UIC and
UIA,JV for cash consideration (the “Maturity
Date”). The Note may be prepaid at any time
without premium or penalty.
3.
Past Due Payments . In addition to paying
the outstanding principal of the Note in accordance with its terms,
Buyer shall make weekly payments of $2,500 to Seller until the Past
Due is paid in full; provided, however, if Buyer sells its
interests in UIC and UIA,JV for cash consideration, the entire
unpaid portion of the Past Due shall become due and payable within
three business days of the consummation of such sale.
4.
Accrued Payments . From the Closing Date until
the earlier of (a) repayment of the Note in full, or (b) the
Maturity Date, Buyer shall continue to accrue payments to
Seller in the amount of 5% of gross monthly collections of
UIC, net of radiologists’ fees, and UIA, JV shall continue to
accrue payments to Seller in the amount of 50% of revenues earned
from studies performed using the GE Camera, net of professional
reading fees paid to radiologists. Such payments shall accrue
until the time specified in (a) or (b) above, at which time such
accrued payments shall also be due and payable in full to
Seller. Upon full repayment of the Note and such accrued
payments: (i) the Management Contract shall be deemed
terminated and of no further force or effect, and (ii) all further
payments by UIA, JV pursuant to the Rental Agreement shall be
payable to Buyer.
5.
No Assumption of Liabilities . It is
expressly understood and agreed that Buyer shall not be liable for
any of the obligations or liabilities of Seller of any kind or
nature arising prior to the Closing in respect of the
Assets. It is expressly understood and agreed that
Seller is delegating to Buyer Seller’s obligations under the
Rental Agreement, but only to the extent such obligations arise
after the Closing.
6.
Taxes . Seller shall be responsible and
shall pay all taxes of any kind or character relating to the Note
or other payments made by Buyer to Seller hereunder, if
any. Furthermore, Seller shall be responsible for the
payment of any transfer taxes of any kind or character arising from
the sale and transfer of the Assets pursuant to this
Agreement.
7.
Representations and Warranties of Seller .
Seller represents and warrants, that:
7.1
Debts, Obligations and Liabilities . Seller does
not have any debts, liabilities, or obligations of any nature,
whether accrued, absolute, contingent, or otherwise, whether due or
to become due, related to or encumbering the Assets.
7.2
Interests In Assets . Seller has good and
marketable title to or valid interests in all the Assets, whether
real, personal, mixed, tangible, or intangible. The
Assets are free and clear of restrictions on or conditions to
transfer or assignment, and free and clear of mortgages, liens,
pledges, charges, encumbrances, equities, claims, easements,
covenants, conditions or restrictions, except the lien of current
taxes not yet due and payable and possible minor matters that, in
the aggregate, are not substantial in amount and do not materially
detract from or interfere with the Assets. All the
tangible Assets are in good operating condition and repair,
ordinary wear and tear excepted.
7.3
Compliance with Laws . Seller has complied with,
and is not in violation of, any statute, law or regulation
affecting the Assets.
7.4
Litigation . There is not pending, and Seller is unaware of
any threatened suit, action, arbitration or legal, administrative
or other proceeding, or governmental investigation, against or
affecting the Assets.
7.5
Agreement Will Not Cause Breach or Violation
. The consummation of the transaction contemplated by
this Agreement will not result in or constitute any of the
following: (1) a default or an event that, with notice
or lapse of time or both, would be a default, breach or violation
of any lease, license, promissory note, conditional sales contract,
commitment, indenture, mortgage, deed of trust, or other agreement,
instrument or arrangement to which Seller is a party or by which
the Assets are bound; (2) an event that would permit any party to
terminate any agreement or to accelerate the maturity of any
indebtedness or other obligation of Seller related to the Assets;
or (3) the creation or imposition of any lien, charge or
encumbrance on the Assets.
7.6
Organization ; Authority and Consents
. Seller is a corporation duly organized and in good
standing under the laws of the State of Georgia and is qualified to
do business as a foreign corporation in each other jurisdiction
where the character of its assets or business would require such
qualification. Seller has the right, power, legal
capacity and authority to enter into and perform its obligations
under this Agreement, and no approvals or consents of any
governmental authorities or persons other than Seller are necessary
in connection with it. The execution and delivery of
this Agreement by Seller has been duly authorized by all necessary
corporate action on the part of Seller.
7.7
Full Disclosure . None of the representations and
warranties made by Seller in this Agreement, or made in any
certificate or memorandum furnished or to be furnished by Seller,
contains or will contain any untrue statement of a material fact,
or omits to state a material fact, necessary to make the statements
made herein not misleading. All representations and
warranties of Seller included in this Agreement and in any written
statements delivered to Buyer under this Agreement will be true and
correct as of the Closing Date as if made on that date.
8.
Indemnification and Survival of Representations and
Warranties .
8.1
Survival of Representations, Warranties, Covenants and
Agreements . The representations, warranties,
covenants, agreements and undertakings of Seller set forth herein
shall survive the Closing.
8.2
Indemnification by Seller . Seller shall
indemnify, defend and hold harmless Buyer and its past and present
officers, directors, affiliates, agents and representatives against
and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable
attorney’s fees, that Buyer shall incur or suffer that arise,
result from or relate to any breach or inaccuracy of, or failure by
Seller to perform, any of its representations, warranties,
covenants or agreements in this Agreement or in any schedule,
certificate, exhibit or other instrument furnished or to be
furnished by Seller under this Agreement. Specifically,
without limiting the foregoing, Seller shall be solely responsible
for the payment of any sums incurred as a result of any claim made
by a third party with respect to the Assets.
9.
Cooperation in Securing Consents of Third
Parties
